Peruvian President Dina Boluarte is under investigation over allegations of illicit enrichment and faces calls for her ouster.

Prosecutors in Peru are targeting President Dina Boluarte in an investigation into allegations of illicit enrichment, sparked by her wearing of luxury Rolex watches in public. Police raided her home and the presidential palace last weekend in search of evidence, and the country’s attorney general said Tuesday that the probe has widened to include jewelry and financial transactions worth hundreds of thousands of dollars. The president has denied wrongdoing. How likely is the investigation to destabilize Boluarte’s government? How solid is Boluarte’s government and its capacity to rule, given that she has an approval rating of just 8 percent, according to an Ipsos poll published in February? How is Peru’s current political environment affecting business and investment in Peru?

Cynthia McClintock, professor of political science and international affairs at The George Washington University: “‘Rolexgate’ has rocked Dina Boluarte’s government. Impeachment proceedings are virtually certain, and her removal from office is very possible. The allegations of illicit enrichment began with photographs of a Rolex watch priced at about $19,000 on Boluarte’s wrist and intensified with revelations of additional watches and a Cartier bracelet priced at about $50,000 and, most recently, deposits of hundreds of thousands of dollars in her bank accounts. Not only is Boluarte’s ostentation offensive, but the assets were not declared in her affidavits to electoral authorities. Boluarte has not provided any credible explanation; indeed, she failed to appear at a scheduled appointment with prosecutors—triggering their entry by force into her house. Boluarte hails from modest origins and has never earned a salary that would enable such purchases; the suspicion, of course, is that she took bribes. Still, Boluarte could survive; she has built an alliance with the large opportunistic sectors of Peru’s Congress, and legislators fear that, if she is impeached, the calls for not only immediate presidential but also legislative elections will be rekindled, triggering the loss of their jobs. However, legislators also worry that a defense of Boluarte—whose approval rating was the lowest among all Latin American presidents even before the corruption allegations—could hurt their future prospects. Peru’s political instability has taken a toll on its economy; the massive political protests of late 2022-early 2023 and politicians’ increasing complicity with corrupt actors were factors in Peru’s 2023 economic contraction of 0.6 percent. Currently, business sees no prospects for helpful reforms in procurement, taxation or education, and there are fears that new elections will bring to power demagogic renegades.”

Augusto Álvarez Rodrich, daily columnist on political affairs at La República: “Dina Boluarte faces a new crisis due to her use of luxury watches and income whose origin she has not been able to explain. This has led to a preliminary investigation on allegations of illicit enrichment that weakens her government. However, her presidency has been marked by instability since its beginning amid strong protests that resulted in 50 deaths and international isolation. The weakness of her presidency is explained by 1.) her unpopularity (her approval rating is 8 percent); 2.) her inability to react politically to crises; 3.) her ineffectiveness in solving the problems of greatest concern to the people (serious insecurity, deterioration of the economy and corruption); and 4.) the lack of the government’s own parliamentary bench. This makes instability the main feature of the Boluarte government, and the main objective of Boluarte’s presidency is survival. In this context, prosecutors’ preliminary investigation generates more complications for Boluarte’s presidency, but it will take place in two areas. The first is the judicial one, with processes that have long durations. The second is that of politics, with shorter durations and motivations based on interests rather than principles, but in which Boluarte has the support of a legislative coalition that is aware that her fall would mean a shortened term of the current Congress, which is the main source of her government’s relative stability. Therefore, despite the fragility and instability of the government, the most likely political scenario continues to be that President Boluarte will be able to complete her term that ends in July 2026. Although the economy is rebounding after the slowdown of recent years, political turbulence affects the business climate for investments, with the two main sources of uncertainty being whether Boluarte will reach the end of her term in 2026 and who can win the presidency that year to replace her.”

Julio Carrión, professor in the Department of Political Science and International Relations at the University of Delaware: “For the foreseeable future, President Boluarte is going to operate on two distinct tracks. The first is the judicial investigation of illegal enrichment. On this track, the president faces real dangers. The investigation has been expanded to include bank deposits of ‘unknown origin’ she made between 2016 and 2022, which exceeded $400,000. Let’s remember she became vice president in July 2021 and was minister of development of social inclusion until November 2022. She has been reluctant to explain the origin of the watches and other jewelry, which might bring additional charges of obstruction of justice. This investigation will take some time to unfold and may bring a constitutional accusation before Congress. The second track is political, and in this she faces firmer terrain, at least for now. Her new prime minister is likely to be confirmed, and she changed six ministers to secure that vote of confidence in Congress. In fact, Congress needs Boluarte in the presidency to continue introducing institutional reforms that would give the parties in control an advantage in the 2026 election. After securing the creation of the Senate and removing the ban on congressional re-election, they are aiming at taking control of the electoral institutions. They also need her to serve their constituencies. Boluarte quickly signed several bills that provide questionable benefits to informal activities and illegal mining. However, her usefulness to Congress will eventually run out. Her nightmare scenario is that the constitutional accusation reaches Congress at a time when Congress feels she is no longer needed.”

Anthony Laub, founding partner at LQG Energy and Mining Consulting: “Since the affair of President Boluarte’s luxury watches was uncovered, the government has responded very poorly. The prosecutor’s office has been acting with unusual speed in this case. What should have been quickly clarified is generating greater political noise and weakening Boluarte even more, as her current approval rating is only 8 percent. The government recently changed six ministers, and it is unclear if this is to divert attention from this case or if it results from an agreement with Congress to obtain a vote of confidence for the cabinet, allowing the government to stay in place while investigations are carried out. In any case, investigations will continue and, assuming that it is found that there has been illegal enrichment, it will lead to a judicial process that will begin when Boluarte leaves the presidency. At the same time, several lawmakers are seeking to remove Boluarte from office. Most likely, the motion will not pass since, if the president is ousted, early elections must be called, which also includes electing a new Congress. The government has not enjoyed stability or popularity since it was installed in December 2022, and it seems that investors have already internalized the political fragility-though this contrasts with the country’s macroeconomic solidity—and most investors are maintaining their investment plans with some degree of caution.”

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